Chips Off The Menu, But Stable Economic Ties Crucial: Raimondo

In the first breakthrough from US Commerce Secretary Gina Raimondo’s ongoing China visit, Washington and Beijing agreed to launch an export control enforcement information exchange and a new working group on commercial issues.

The exchange would provide China a platform to reduce misunderstanding of US security policies, the US Commerce Department said on Monday. The working group, meanwhile, will give Beijing a potential forum to express concerns.

The moves followed meetings between Raimondo and Chinese Commerce Minister Wang Wentao, the department said.

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The first in-person meeting of the working group will occur at the assistant secretary level at the Ministry of Commerce in Beijing on Tuesday, the statement said.

China has sharply criticized US efforts to block China’s access to advanced semiconductors through export controls, but Raimondo has said those are not open for debate.

Putting a tough but positive slant on trade talks with Chinese officials in Beijing, Raimondo stressed that it was “profoundly important” for the world’s two biggest powers to have a stable economic relationship.

Raimondo is looking to boost business ties as US firms have reported increasing challenges with operating in China, while China has sharply criticized US efforts to block its access to advanced semiconductors.

‘We need to be direct, open and practical’

Raimondo said the world expects the United States and China will have a stable economic relationship; the two countries share more than $700 billion in annual trade.

“It’s a complicated relationship. It’s a challenging relationship. We will of course disagree on certain issues,” Raimondo said. “I think we can make progress if we are direct, open and practical.”

Raimondo, who is holding three days of talks with Chinese and business leaders to boost ties, met with Commerce Minister Wang Wentao on Monday for just over two hours.

Wang said US-China economic relations matter not just to the two countries, but also the rest of the world and expressed appreciation of Raimondo’s remarks that she likes trade with China.

China looking for stronger cooperation: Wang

He said he was ready to work together to “foster a more favourable policy environment for stronger cooperation between our businesses to bolster bilateral trade and investment in a stable and predictable manner.”

Raimondo said the United States and China have “worked over the summer to establish new information exchanges and working groups that will enable us to have more consistent engagement in our relationship.”

Some Republicans in Congress have criticized the suggestion that the United States would agree to a working group with China on export controls on advanced semiconductor chips.

Raimondo has declared off-limits any discussion of US export curbs aimed at slowing Beijing’s military advances.

‘99% of trade unaffected by export controls’

“Of course, of matters of national security there is no room to compromise or negotiate,” she said, adding the vast majority did not impact national security concerns.

At an event later on Monday, Raimondo showed off a number of personal care products made by US companies and sold in China to make the case that trade can flourish outside products with national security implications, and said 99% of trade between the two countries is unrelated to export controls.

“No one can argue that health and beauty aids interfere in our national security,” she said. “The plan, and the hope, is that our commercial relationship, if done right, can stabilize the political relationship.”